What Changed

In August 2024, the National Association of Realtors settlement took effect, fundamentally changing how real estate commissions work in the U.S.:

  1. Seller offers of buyer-agent compensation are no longer displayed on the MLS
  2. Buyers must sign a written agreement with their agent before touring homes, specifying the agent’s compensation
  3. Commissions are fully negotiable — there is no “standard” rate

Before the settlement, sellers typically paid 5-6% of the sale price, split between listing and buyer’s agents. This was presented as an industry standard, though it was always technically negotiable.

How Commissions Work Now

For Sellers

You negotiate only your listing agent’s fee. Common structures:

  • Flat percentage: 2-3% (down from the old 2.5-3% listing side)
  • Flat fee: $3,000-$7,000 for MLS listing and basic services
  • Tiered: Lower base fee + performance bonus if sold above asking

You may still choose to offer buyer-agent compensation (advertised outside the MLS), but it’s optional. The strategic question: does offering it attract more buyers, or does it just inflate your cost?

For Buyers

You sign a buyer-agent agreement specifying:

  • The services your agent will provide
  • How much you’ll pay them (flat fee, hourly, or percentage)
  • Whether you’ll seek seller concessions to cover your agent’s fee

Common buyer-agent fee structures:

  • Percentage: 2-2.5% of purchase price
  • Flat fee: $5,000-$10,000
  • Hourly: $150-$350/hour (rare but emerging)

If the seller offers buyer-agent compensation and it covers your agent’s fee, you pay nothing additional. If it doesn’t, you cover the difference.

The Savings Math

On a $400,000 home under the old system:

  • Total commission (6%): $24,000
  • Listing agent (3%): $12,000
  • Buyer’s agent (3%): $12,000

Under the new system, realistic scenarios:

  • Seller lists at 2%: $8,000 (saves $4,000)
  • Buyer negotiates 1.5% agent fee: $6,000 (saves $6,000)
  • Total new commission: $14,000 (saves $10,000 vs. old model)

Or: the buyer finds a flat-fee agent at $5,000 and the seller lists at 1.5% ($6,000). Total: $11,000 — less than half the old standard.

Flat-Fee and Discount Brokerages

Several models have gained traction:

  • Flat-fee MLS listing: $300-$500 for MLS access only; you handle showings, negotiations, paperwork
  • Limited-service listing: $2,000-$4,000 for MLS, photography, and contract support; you handle showings
  • Full-service discount: 1-1.5% for full representation
  • Buyer rebate agents: Full service but rebate 0.5-1% of purchase price to the buyer at closing

The quality range is wide. Some flat-fee services are bare-bones; others provide nearly identical service to a traditional agent at a fraction of the cost. For a closer look at one of the most-used flat-fee MLS providers and how it stacks up against a full-service agent, see Fizber flat-fee MLS vs. realtor on The Resale Trap.

When to Use a Traditional Agent

Full-service agents at 2.5-3% still make sense when:

  • You’re in an unfamiliar market and need local expertise
  • The property has complex issues (estate sale, divorce, title problems)
  • You’re a first-time buyer who needs guidance on the entire process
  • You’re selling a high-value property where pricing strategy significantly impacts outcome

When to Go Flat-Fee or DIY

Consider lower-cost options when:

  • You’re an experienced buyer/seller who understands the process
  • The market is straightforward (standard sale, clear title, no contingencies)
  • You’re buying new construction (builder has their own sales team; your agent adds limited value)
  • You’ve already found the property and just need transaction management

How to Negotiate

Sellers

  1. Interview 3+ agents and ask each for their fee structure
  2. Ask what services are included at each price point
  3. Request performance data: average days on market, list-to-sale ratio
  4. Negotiate a bonus structure: lower base fee with a bonus for selling above asking

Buyers

  1. Ask your agent to specify their fee in the buyer agreement
  2. Request that your offer include a seller concession to cover your agent’s fee
  3. Compare flat-fee buyer agents if you’re comfortable managing parts of the process
  4. In competitive markets, offering to cover your own agent’s fee can make your offer more attractive to sellers

HomeStats tracks market conditions by state, including days on market and price drops, which indicate your negotiating leverage. In buyer-friendly markets (score 60+), sellers are more likely to accept concession requests.

For the complete breakdown of transaction costs — commissions, closing costs, and the total cost of buying and selling — The Resale Trap covers every dollar that changes hands.